By Jenna Anderson, Staff Writer
Nearly 90% of Americans use Google as their search engine, making the company’s name synonymous with searching the web.[1] In its civil lawsuit against Alphabet Inc., Google’s parent company, the U.S. Department of Justice (DOJ) contends Google became the nation’s top search engine by engaging in illegal anti-competitive practices. The DOJ alleges Google violated the Sherman Antitrust Act, which prohibits activities that restrict interstate commerce and competition in the marketplace.[2]
First enacted in 1890, the Sherman Act has been applied (with mixed success) to break up monopolies in various industries.[3] The Sherman Act was the statutory basis for splitting the Standard Oil Company into 34 entities in 1911, spinning off AT&T phone services into regional “Baby Bells” in 1984, and, most relevant to the case at bar, Microsoft settling with the DOJ in 2001. According to DOJ attorney Kenneth Dintzer, U.S. v. Google will impact “the future of the internet.”[4]
In its opening arguments, the government claimed that Google utilizes a two-fold approach to monopolize search engine and advertising markets. The first method involves contracts with phone and software companies. Since the mid-2000s, Google has formed distribution agreements where it pays to be the default search engine on consumers’ devices and browsers. Then, as Google processes more search queries, it uses the data to improve its product, sell valuable advertising space on its search result page, and fund more agreements. The vast resources at Google’s disposal were most recently evidenced by its quick development of its version of generative artificial intelligence, Gemini.[5]
Rival search engines Bing and DuckDuckGo make up only 6.36% and 1.81% of the U.S. search engine market share, respectively.[6] The government argues this is evidence of a monopolistic “feedback loop” where Google uses its unfair advantage to reinforce its dominance as a search engine. Google’s lawyers have countered that consumers can change their search engine with a few clicks, and stay because it provides a superior product.
The government faces a steep burden in proving Google’s actions caused harm to consumers through higher prices and worse products. The burden of harm is based on a legal doctrine known as the consumer welfare standard. Antitrust enforcers and courts have applied the consumer welfare standard since the late 1970s to assess the legality of corporate activity. Conservative jurist Robert Bork is credited with popularizing this standard. Despite Bork’s theory being designed to serve as a consistent tool for courts, it is a misnomer.
Bork’s consumer welfare standard is what economists consider “total welfare.” Bork’s calculation of consumer welfare aggregates the surplus of consumers and products, artificially heightening the point where government involvement is required. In contrast, ‘true’ consumer welfare prioritizes consumers’ direct and immediate welfare and does not aggregate producer and consumer surplus.[7] This discrepancy means a court applying Bork’s consumer welfare standard would allow corporate activity if the cost savings to producers were greater than the harm to consumers.
Although the contradictory consumer welfare standard has been cited in hundreds of federal cases, it is not without criticism. Some say Bork misunderstood the legislative history of the Sherman Act or intentionally mislabeled the standard to support the neoclassical goal of limiting government intervention.[8] Individuals affiliated with the New Brandeis school have taken that criticism one step further, advocating for antitrust interventions that consider other aspects of social welfare, such as environmental protections and labor rights.[9]
Despite decades of jurisprudence on its side, big tech companies face other potential legal challenges. Google is facing antitrust lawsuits unrelated to its search engine and advertising activity, as are Facebook and Amazon. Meanwhile, Congress advanced bipartisan legislation to outlaw pre-installation and other anticompetitive practices by technology companies.[10]
Antitrust enforcement has utilized an inaccurate version of the consumer welfare standard for over two decades. Weighing corporate benefits when a corporation is accused of anticompetitive activity is antithetical to antitrust law. Unless the courts employ an accurate standard, technology companies will continue to control consumers and their information.
[1] Search Engine Market Share United States of America, Global Analytics (2023), https://gs.statcounter.com/search-engine-market-share/all/united-states-of-america (last visited Sep 18, 2023).
[2] U.S. v. Google. No. 1:23-cv-00108 DOJ (D.C. Cir., 2021).
[3] Sherman Anti-Trust Act. 26 Stat. 209, 51 Cong.
[4] CNN, Landmark Google trial opens with sweeping DOJ accusations of illegal monopolization. (Sept. 12, 2023). https://www.cnn.com/2023/09/12/tech/google-antitrust-lawsuit-government-trial-duplicate-2/index.html.
[5] Dylan Patel & Daniel Nishball, Google Gemini Eats the World. (Aug. 27, 2023). https://www.semianalysis.com/p/google-gemini-eats-the-world-gemini.
[6] StatCounter, Search Engine Market Share, (Accessed Sept. 18, 2023). https://gs.statcounter.com/search-engine-market-share/all/united-states-of-america.
[7] John B. Kirkwood & Robert H. Lande, The Fundamental Goal of Antitrust: Protecting Consumers, Not Increasing Efficiency, 84 NOTRE DAME L. REV. 191, 213 (2008).
[8] Mark Glick & Darren Bush, Breaking Up Consumer Welfare’s Antitrust Policy Monopoly, 56 SUFFOLK U. L. REV. 201 (2023).
[9] Amelia Miazad, Prosocial Antitrust, 73 HASTINGS L.J. 1637 (2021).
[10] American Innovation and Choice Online Act. 168 Cong. Rec S 3497.
